Anyone who’s been involved with rental property management for even a short period of time knows how damaging it can be to your property, your business reputation, and your sanity when you have to deal with a “bad renter.”
But no one has experienced all of the rental horror stories out there firsthand, and both new landlords and old ones can learn from the bad experiences of others.
Below are four common examples of rental property management nightmares that other landlords have faced, along with some tips on how to keep this from happening to you.
Learn from these rental property management horror stories
- Illegal subletting
Giving permission to a renter to sublet out a portion of his or her apartment to a third party, especially when he/she is also still living there and it’s only temporary, isn’t always a bad idea. If your renter takes full responsibility and the new tenant passes a background check – no problem.
But be on the lookout for renters who illegally sublet your unit without letting you know. Oftentimes, this is done through Airbnb or other online sites where illegal subletters advertise. For a small fee, you can sign up for a sublet watch service that will scour Airbnb and other online sites for this kind of activity.
Also, be wary of applicants who don’t live or work in the area or who say they want to use your unit as a “second home.” Question and probe until you’re satisfied that their purposes for renting are legitimate. Otherwise, wait for a different renter to come along.
- Apartment squatting
Be aware that state laws often favor renters in a lopsided manner, to the point that it takes a very lengthy and costly legal process to get them physically evicted. And by that point, you can expect thousands of dollars worth of property damage, which could mean pursuing them (sometimes in vain) with a lawsuit to recover your repair expenses.
There are people out there who literally go from apartment to apartment, refusing to pay rent either immediately or within a couple months from moving in. They know the law is tilted their way, and they plan on taking advantage of it – and of you!
The best defense you have is a strict screening process that includes criminal background checks, calling up the applicant’s past two landlords, a credit check, two or three references, and a face-to-face interview.
- Direct deposit scams
Setting up direct deposit and requiring it or incentivizing it for rental payments with all your renters is a way to reduce the chances of a missed or late rental payment. Be aware that direct deposit doesn’t magically solve all rent collection problems though. Remember that renters can arrange payment patterns with his/her own bank any way desired and without informing you.
One story we’ve heard of had a renter setting up direct deposit but then later secretly switching over to pay only every other month. The busy landlord failed to diligently check for the payment every month and didn’t catch on to the scam for some time. Always pay close attention to all rental payments – even those coming in automatically.
- Drop box theft
Setting up a convenient drop box where tenants can leave their rent checks after hours sounds like a great idea. But maybe it’s not. One property manager tried it and soon had the drop box robbed.
That not only meant tens of thousands of dollars in lost rent but also the risk of identity theft for dozens of their tenants. Obviously, this created some very disgruntled tenants.
Rental property management can be a rewarding and lucrative business, but it can also be very frustrating. Not all property rental nightmares are caused by bad renters – but most are. So screen all applicants thoroughly and stay on top of rent collection and who’s living in your rental units!
Son-Rise Property Management has been serving the property management needs of Bellingham and Whatcom County since 1996. Contact us today to see how we can help you find a rental property for your family or manage your rental properties.